Bush's drilling deal shields Glades, gulf

Preventing drilling for natural gas off Pensacola will cost $115-million, and blocking new oil wells in South Florida will cost $120-million.

[Times file photo: Fred Victorin]An airboat tours the Big Cypress National Preserve, where the Collier family can continue pumping oil for 10 years. Its companies have mineral rights for about 800,000 acres, half in Big Cypress and two national wildlife refuges.

WASHINGTON -- Defusing two longstanding environmental disputes, President Bush and Gov. Jeb Bush announced deals Wednesday that could prevent drilling for natural gas off Florida's gulf coast and block the expansion of oil wells in a federal preserve beside the Everglades.

The federal government will pay Chevron and two other companies $115-million for oil and gas leases in an area of the Gulf of Mexico known as Destin Dome, about 25 miles off the beaches of Pensacola.

Separately, the government plans to pay $120-million in cash or credits to the Collier family, one of South Florida's largest land developers, to stop drilling for oil in the Big Cypress National Preserve and other areas of South Florida.

The deals won't end the threat of drilling near Florida's coast, nor will they stop production in Big Cypress, where pumping could continue for 10 years.

President Bush said the agreements show the federal government is "a strong partner" in protecting the environment. And Gov. Bush, boasting that Florida has some of the world's best beaches, said: "It just did not seem right that 25 miles off the coast there might be drilling. Today, that possibility doesn't exist."

The agreements represent a political double-play by the Bush brothers. They will boost Jeb Bush's environmental credentials as he seeks re-election this fall and will help President Bush rebut criticism that his administration kowtows to oil companies.

Florida environmentalists were stunned and elated by the dual announcement.

"What a day!" said Mark Ferrulo, director of the Florida Public Interest Research Group, a longtime drilling opponent.

"In the 20-year fight to keep oil rigs off our shore, this may go down as the most important victory ever," Ferrulo said. "It may not technically be the nail in the coffin because more than two active leases remain, but it's pretty close."

Democratic Sen. Bob Graham was more skeptical, noting that there were many leases not covered by the deals.

"While I am pleased that the most immediate threat to some of our nation's premier beaches has been avoided, there are 99 other leases in the eastern gulf that remain a threat," Graham said. "This is a step in the right direction, but today's developments should be a starting point to permanently end future drilling off Florida's Gulf Coast."

However, Gov. Bush contended the other leases are "dormant."

"The chances of them becoming active are incredibly remote," he said outside the White House after meeting with his brother. "Effectively, off the shorelines of Florida, there will be no drilling."

Chevron, Conoco and Murphy Exploration and Production have been vying to drill in Destin Dome since the first leases were granted during the Reagan administration. In 1996, the three companies, led by Chevron, submitted a plan to sink 21 natural gas wells in the remarkably clean waters where redfish and Spanish mackerel now spawn.

But the perception that offshore drilling could sully their beaches unites Floridians as few other environmental questions ever do. A 1999 public hearing in Pensacola on Chevron's plans drew more than 500 passionate drilling opponents ranging from buttoned-down executives to teenage skateboarders with Mohawk hairdos.

Because Bush's predecessor, Lawton Chiles, rejected the drilling plan in 1998, Chevron asked the federal government to overturn the decision. By 2000 the leases had become an issue in the presidential race -- after Al Gore was caught waffling -- and the subject of a lawsuit. In the suit, Chevron contended federal officials were taking too long to decide their appeal and demanded compensation instead.

Wednesday's announcement left oil company officials glum, since their lengthy pursuit of drilling rights ended with a federal payoff, not the big paydays they had envisioned.

ChevronTexaco spokesman Fred Gorell said his company was "very disappointed," and Conoco spokesman Carlton Adams said, "'When you spend the number of years that we have, and the effort that went into this, and you know there are considerable natural gas reserves there, then there's a sense of, 'Gee, I wish we could have.' "

For walking away from their seven leases, Chevron and Conoco will get $46-million each, which company spokesmen said would match what they had invested in trying to drill there. Murphy gets only $23-million, because the Arkansas-based company is hanging onto two leases in hopes of someday winning both federal and state permission to drill. Although the prospect appears doubtful now, investor relations director Mindy West said: "A lot can happen in 10 years. We think one day that may be valuable property."

For the Collier family, which owns so much land in southwest Florida that the county was named after them, the pursuit of oil has continued for 60 years. Today, the Collier wells produce about 2,500 barrels per day from eight wells that cover 200 acres. But Collier companies have underground mineral rights for about 800,000 acres.

Environmentalists have been alarmed at those prospects, especially because that includes about 400,000 acres of the Big Cypress National Preserve, Ten Thousand Islands National Wildlife Refuge and the Florida Panther National Wildlife Refuge.

The existing wells are not covered by the agreement because they are covered by long-term leases with Calumet Florida Inc., a Texas oil company. Those wells will continue to pump for as long as 10 years, until they are no longer productive. But the new deal would prevent drilling on the 400,000 acres in the federal land.

The Colliers, who are large contributors to the Florida GOP, would still have rights for the 400,000 acres that are not on federal land, but the companies would need state and federal permits to drill there.

It's unclear whether the administration can get approval from Congress for the $120-million Collier deal, but Rep. C.W. Bill Young, the Largo Republican who chairs the House Appropriations Committee, said he supports the deal and is optimistic.

The Bush brothers and their aides described the deals in grand terms about protecting the environment, but there was no doubt that politics had a role. Sens. Graham and Bill Nelson, both Democrats, were not invited to the White House announcement even though they had long been involved in negotiations with the Collier family.

"I think this will help Jeb Bush politically because this certainly shows him in a positive environmental light," said Enid Sisskin, legislative chair of a Panhandle antidrilling group called Gulf Coast Environmental Defense.

While conceding that the two deals are good for the environment, Florida Democratic Party spokesman Ryan Banfill attacked Gov. Bush's motives.

"You've got to wonder if this wasn't an election year if they'd be flying up to the White House doing this," he said, adding, "In pure Bush fashion, it puts millions of dollars into the pockets of the oil industry."

Gov. Bush, asked if he would gain politically from the announcement, said, "I hope so -- but more importantly, it is good public policy. When there is a convergence of good policy and good politics, I don't think we should be ashamed of it."

-- Times researchers Kitty Bennett and Caryn Baird contributed to this report.

Agreements 'in principle'

The federal government will pay $115-million to three oil companies for nine of 11 leases in the Gulf of Mexico's Destin Dome natural gas field, 30 miles south of Pensacola. The remaining two leases could not be developed for 10 years, and only with the agreement of Florida and the federal government.

The federal government will pay $120-million in cash or lease credits to Collier Resources Co. in exchange for mineral rights under 400,000 acres near the Everglades, including parts of Big Cypress National Preserve, Florida Panther National Wildlife Refuge and Ten Thousand Islands National Wildlife Refuge. Existing drilling in 10 wells could continue for as long as 10 years.

Oil in the Collier reserves is estimated at 40-million barrels, equal to about two days of U.S. oil consumption. Destin Dome is believed to contain at least 700-billion cubic feet of natural gas.